Buyers, listen up.
There are still ways to find value in the market. Let me use an example at the Cosmopolitan. In 2007, unit 2710 sold for $552,450. Back in late November of last year, this same unit came on the market at $325,000. If you went to the open house or toured during that first day on the market, you may have been disappointed. It was obvious at that time that you would have to compete with multiple offers.
By the time the bidding stopped, the price for #2710 went up to $360,000. Now, it would be easy for your co-worker, neighbor, family or friend to tell you that “over-paying” for a unit is a HUGE mistake. What all the people in your life don’t know, is that paying $360,000 for this unit was paying just $372 per square foot. If you take the average cost per square foot for Downtown Seattle 1 bedrooms over the last 90 days, you get a number of $532 psf.
So, what is the takeaway? We have to do our homework. The value is often in the numbers. No one likes to compete in multiple offer situations. It makes us feel that we are overpaying. If we do our homework before, build a spreadsheet with specific objectives and stick to our plan, we can find GREAT value in the market and make sense of investing – even during this wild and crazy market.
Disclaimer – The views of this unit will be altered by a neighboring apartment project. I still feel this unit was a GREAT value and would consider it regardless.
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